Swiss Re’s latest Sigma report says income inequality is rising in advanced nations and this is contributing to a massive loss in insurance protection.

The reinsurer says the issue has resulted in $US252 billion ($363 billion) of foregone insurance protection in 2019 alone.

The war in Ukraine has intensified the global cost of living crisis by pushing up food and energy prices when inflation is already high, the report says.

But insurance can play a key role in mitigating the problem.

“Insurance is effective in mitigating inequality by providing financial relief to households hit by shocks,” Swiss Re says.

“In the current high-inflation environment, product design and policy support that promote insurance affordability are particularly important.

“With new technologies, insurers can use a wide range of distribution channels to expand access to insurance coverage.

“For example, microinsurance can help reduce inequality and promote inclusive growth by providing affordable and efficient insurance products to underserved low-income households.”

See Analysis.